Evan Cervantes lives in a heavily residential area with busy streets in Sunland in a house on a 5,000-square foot lot. He has a busy road on one side, neighbors on two sides and an empty hill lot in back with a few trees and some brush. He and his neighbor who helped him diligently clear brush to keep it clean affectionately nicknamed the hill Poop Mountain as that’s where dogs get walked.
Lemonade has been Evan’s home insurer since 2019 and each year his annual premium was about $1,000 for the coverage. Then, as of January 1, Lemonade suddenly jacked his insurance premium 112 percent to over $2,000. “I called to request information and they said, ‘Yeah, this is just what it is because yours is a high fire risk zone now.’ To which my response was, ‘the house didn’t move.’ They said, ‘we can do it, it’s all legal by the state of California.’ I swallowed it. I didn’t know what to do except to accept this because I don’t know the law.”
Evan contacted a few other home insurance companies and left messages and his contact information. They responded that his house was uninsurable and to call the CA FAIR plan. “A red flag was insurance companies saying call the FAIR Plan, all of us kick in and figure out who covers the high-risk people,” he said. In fact, homeowners can only turn to the FAIR Plan if their home insurance is non-renewed. Evan had not received a nonrenewal letter but faced a doubling of his premium. He wasn’t going to cancel his home insurance to get on the FAIR Plan that he already found suspect.
In the meantime, Lemonade did finally provide an answer in writing as to why his premium doubled. They wrote the following:
Here’s what happened: Due to the loss trends in the state of CA as well as industry standards, we filed for a rate increase with your state.
I apologize for the frustration this has caused however, we must charge rates as filed and approved by the state in order to remain compliant and to ensure we’re offering the right rate for the coverages we’re providing. Some ways to lower your premium include increasing your deductible or lowering your coverage limits. If you’d like to explore these options, please contact us….
In looking at your safety discounts, the only thing you could do to add any discounts would be to add a Smart Water Valve that shuts off your water if it detects a water leak in your system…..I also want to make sure that we have all of the discounts added to your fire and theft alarms that we can. I am not sure if it will take more money off, but I am willing to try if you are!
Do you have a sprinkler system? Do you have a fire extinguisher? Do you have a smoke alarm? Does your fire or theft alarm have central station reporting? Let me know and I can add these discounts to your policy.
Lemonade did not ask if Evan had taken other steps to mitigate fire risk such as clear property of brush so Evan asked.
“I specifically asked them on the phone if there was any way to lower my premium via additional brush clearance, removing trees etc. but Lemonade did not offer me any way of lowering my premium by making my property more fire safe,” he said. “I personally believe we should be able to receive a discount for brush clearance, since it’s the ONLY thing we can do to mitigate fire damage to my home—a fire that will inevitably be started by a power company, climate change, or both.”
Evan’s neighbors are facing the same problems getting affordable coverage. The neighbor cleaning the hill with Evan told Evan his situation was even worse. His insurance premium with Travelers is now $6,668 a year. The neighbor sold his house and moved.
“We live in dystopian capitalistic hellscape where we basically burn our money by giving it to people who already have too much,” said Evan. “It makes no sense that private companies that have millions of dollars to lobby the government for favorable laws get to dictate how much coverage we’re required to have on our own assets. We’re not even paying it to the government… but to a private company.
“We are so disgusted with how everything is going that we are strongly considering selling our house in June and escaping to Europe for a year while our son is still young. I make more money than I EVER expected to make in my whole life, yet I am hand to mouth, and it gets worse every day.
“We can’t let these grifters get away with this crap forever. In this instance specifically, it’s especially insane because the impetus of WHY my home is in an ever increasingly dangerous fire zone, has nothing to do with my family, and everything to do with private companies ignoring the environmental impact of their policies and decisions. Most of our wildfires are caused by negligent power companies and increasingly hot/dry seasons provoked by greenhouse gases.”
